I always thought that Indians should be instinctively good at value investing. I mean we love bargains and like to minimize our expenditures. And if there is any community which would be best at value investing it has to be Gujjus. Mohnish Pabrai makes the same point in his book Dhando Investor. Dhando ( dhanda or business) as practiced in Gujarat has always been minimizing the downside risk while retaining the upside potential pretty much what value investing preaches , or so the author claims.
And if you think about it , Warren Buffett is like a Gujarati in many ways. He is lot more wealthy than his appearance would suggest. He loves to eat junk food. He loves to make money but has few material indulgences. You would never expect him to flaunt his wealth.You are almost left wondering why he enjoys making money so much.
These are amusing observations but you cannot take them seriously. But you cannot make the mistake of taking this book lightly either. The Indian metaphors used by the author do manage to explain the tenets of value investing very well , or so i think.
Like if you do not have an exit strategy for an investment operation well defined in advanced you would feel like Abhimanyu in Chakravyuh without a proper way out. Or comparing the inclination of Patels to take over the boring motel business to Buffets preference for stable predictable business model.
This book can be a delightful introduction to value investing. And for an Indian it can be fun to see Indian metaphors explaining the principles.But if reading for amusement does not interest you Mohnish Pabrai discusses his professional investment operations which alone will make it worth your time and money.
- Amaresh
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